AXA UK is adding strength where it is needed

If ever there was a part of AXA UK that needed some TLC, it is the direct business.

Thankfully, direct and partnerships chief executive Yves Masson has given it just that. He has drafted in new chief operating officer Carlo Nebuloni from AXA’s Italian direct business and new pricing and claims officer Henry de Courtois from AXA Global Direct in France.

These are new positions, and so are strengthening the direct and partnerships executive team. Moreover, it is bolstering the division in areas where it is arguably most needed: operations, pricing and claims.

The UK direct business had a rough ride in 2012. AXA reported in its first-half results that it had cut €99m of revenue from the UK direct motor book after “selective underwriting and portfolio pruning” as well as increased competitiveness.

Swiftcover, the cornerstone of AXA UK’s direct motor underwriting, had grown quickly, and the cuts indicated it had taken on too much business at too low a price.

This was also reflected in the combined operating ratio (COR). The UK direct business reported a COR of 108.8% in the first half of 2012, compared with a total of 99.3% for the other countries in AXA’s direct segment (France, Japan, South Korea, Spain, Italy, Belgium, Poland and Portugal).

Something needed to be done, particularly in light of the Ambition AXA target of a 96% COR group-wide by 2015.

Both Nebuloni and De Courtois should be able to help steer AXA’s UK direct business back on track. They have proven record in direct business in difficult markets.

France and Italy are well served by insurance price comparison sites, so both men will be no strangers to tough competition.

They may not be familiar with the intricacies of the UK market, but common issues are plentiful. For example, before his move, De Courtois was involved with AXA’s initiative for tackling the EU Gender Directive.

In addition, the UK motor market could arguably use a fresh perspective, since so few companies seem to be able to make money in it.

Because they have been appointed from within, Nebuloni and De Courtois will be familiar with group strategy and what is expected of the UK. De Courtois in particular has spent his entire career at AXA.

The hires look like a shrewd move from AXA and Masson – himself an AXA group veteran – and should go a long way in restoring AXA’s UK direct business.